Starting a small shop

[trevorflowers]

I live in Seattle and if it's in an industrial area where a lot of people will need your services then $1500/mo would be a great deal. That said, if I had the land I'd only rent long enough to save enough to build my own building. Especially with a kid on the way, working a minute away from home is worth its weight in gold.

 

[Fish On]

Yes of course the housing market has/had a lot to do with it. But even with my 2020 valuation before the housing market went ridiculous and after my building was finished it increased significantly, a lot more than I expected, if I remember correctly it was close to $70k, I was expecting $20-30k.

I would have preferred it not increase that much, my property taxes have more than doubled from 2016 to 2023.

Now I’m curious about my neighbors, I’m going to have to look and compare!

Are you in the city or county? What's your zoning?

 

[Marvel]

Are you in the city or county? What's your zoning?

I’m on 2.5 acres in the County/Township. “General” Rural zoning.

 

[Marvel]

Pretty sure your neighbors houses without shops increased similar amounts in that same timeframe...

My house without a shop increased a similar amount from then to now. Also, "fully finished upstairs" probably helps too. Remember, we're discussing buildings to contain a commercially viable machine shop, not a harry home shop retirement garage with a mother in law suite.

What do you consider "commercially viable machine shop"?

My shop is 1800 sq ft and I currently have a VF2SS, VF3SS, EC400PP, SL20T and some smaller misc. "support" equipment, all placed comfortably, I could easily tighten it up and squeeze in a couple more machines if needed but I hate the idea of not being able to get my lift in front of a machine if stock is too heavy and blocking my doors so everything is strategically placed. And I am allowed an additional 1200 sq ft I can add if and when needed.

I don't personally want or need to get much bigger. That is part of why I went this route, I am very comfortable where I am at and am actually bigger (equipment wise) than a couple shops I've worked at years ago that were in actual commercial buildings.

The fully finished upstairs is a game room, pool table, bar, indoor basketball arcade, ping pong table, my county actually has the building zoned non-habitable and for "storage". Which is why I was surprised it increased my value like it did.

I did take a look at the 11 other properties on my street all 2.5 acre lots, I could only go back to 2020, average increase was 40% in the last 3 years, lowest at 35% and highest at 54%, mine came in at 48%. My direct neighbor that built a pole barn in 2021 came in at the highest 58% but in 2020 my value was $60k more than his. We built almost identical houses in 2016 (I have a 4 car attached, he has a 3). But from 2016 to now I have an increased value of 129% and his is at 75%. I also put in a pool last year, which did increased my valuation by $25k this year.

 

[MwTech Inc]

Business plan??? Doesn't he already have a "business plan"? Start small, work hard, gradually build up the business until he can quit his day job.

If that's all the OP as these days, his chances of success are slim.
40 years ago, the world was an entirely different place. You were still stuffing cassettes in your car.
OP needs to sit down and get an accurate (or as close as he can) estimate of all expenses to run that shop.
Can he operate the shop on his current income without affecting the household?
Baby on the way, increase in household expenses for sure.
We don't know his financial setup so that plays a part in this too.
Biggest thing he needs to decide is he willing to sacrifice family to achieve this goal.
Family will suffer, there is no way around it. Soon as he takes it on his mindset will change.
Worried about income, getting parts done etc etc
It's just the way it is....he has to decide if it's worth it in the end.
OP may luck out and fall into jobs and all is good, or he could work his butt off, have a lousy family life, no time for any family vacations, have his wife divorce him for never being home, kid grows up seeing his father maybe hour or two a day, and years later regret the day he started.
Only he can deicide......it isn't all roses on the self employment side.

 

[Ox]

Yeah, sure, whatever ....

All of that very well could be true.
True to any business, not just ours.

Sure, lots has changed in the last 40 (34 for me) years, but I don't see how the viability of a new shop starting out is any different? Is this an industry that is normally viable in your area? Are others able to eek out an existance dooing this? If so, you prolly can too.

If anything, I think that these days are a VERY good time to start your own shop (anything that involves blue collar labor). There is a lull in available, let alone driven help, thus leaving the door open for way better opportunities than ever before. ... as long as YOU are one of the "driven".


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Think Snow Eh!
Ox

 

[Marvel]

If that's all the OP as these days, his chances of success are slim.
40 years ago, the world was an entirely different place. You were still stuffing cassettes in your car.
OP needs to sit down and get an accurate (or as close as he can) estimate of all expenses to run that shop.
Can he operate the shop on his current income without affecting the household?
Baby on the way, increase in household expenses for sure.
We don't know his financial setup so that plays a part in this too.
Biggest thing he needs to decide is he willing to sacrifice family to achieve this goal.
Family will suffer, there is no way around it. Soon as he takes it on his mindset will change.
Worried about income, getting parts done etc etc
It's just the way it is....he has to decide if it's worth it in the end.
OP may luck out and fall into jobs and all is good, or he could work his butt off, have a lousy family life, no time for any family vacations, have his wife divorce him for never being home, kid grows up seeing his father maybe hour or two a day, and years later regret the day he started.
Only he can deicide......it isn't all roses on the self employment side.

Damn dude, I don't know if you own a business or not but you sure made life sound depressing as hell!

Since being on my own, I have taken more time off than I have in 20 years as an employee, as an employee for 15 years I think I took 2 or 3 vacations total. I actually don't like taking vacations but the wife and kids convince me to now, and we take about 2 a year now that I am on my own, and last year I took almost 2 full months off, and one of them months was all of June and we didn't even go on vacation. I typically take the last 2 weeks of the year off as well.

My family has greatly benefited from me going into business, I drive my kids to school and pick them up everyday, I've never missed a sporting event and both my kids are in sports damn near all year round!

I'm not saying it can't be terrible, of course business can be as bad as you stated, and not just in our industry, but you won't know until you try and the advise I would give is know when to let go so you don't do as @MwTech Inc "or he could work his butt off, have a lousy family life, no time for any family vacations, have his wife divorce him for never being home, kid grows up seeing his father maybe hour or two a day, and years later regret the day he started."

 

[MwTech Inc]

Been self employed for 30 plus years and successful.(and still have the same wife)
So, we have two members who did well, great.
But OP also needs a reality check.
And yes, any business fits in here.

Marvel.........I never said that the machining business was bad, but the change to family life can be a very real thing.
And I didn't advise him not to try it.
There are WAY too many variables here, I just stated what I have seen with fellow business owners over many years in all types of businesses.

 

[jccaclimber]

Somewhat already covered, but I worked at a place with a similar oil drain system. It really came in handy when a hydraulic test would blow a line over the weekend once a year or so and dump 50 gallons of ATF on the floor. Every bay had a slight drop in from the door so spills would stay contained in the room. We had a big squeegee that looked like a push broom and into the drain it went. Mop the room, and dump that water in there too. It ended up in a big tank with a tap at the bottom, and one a bit higher up.
When the time came to empty it they would pull water from the bottom until it came up oily, move the line a bit, and pull as much oil off the top as they could without sucking water. The foot or so in the middle was left for next time. Useless if you aren't disposing of a bunch of oily waste regularly, but sort of handy if you are.

 

[Garwood]

I put my wife and kids before my business. That has limited my business success to a degree. Probably by a lot if I'm being honest.

Of the handful of $10+ mil self made guys I know none have decent family lives.

I know lots that have family money or married into it

 

[Marvel]

Been self employed for 30 plus years and successful.(and still have the same wife)
So, we have two members who did well, great.
But OP also needs a reality check.
And yes, any business fits in here.

Marvel.........I never said that the machining business was bad, but the change to family life can be a very real thing.
And I didn't advise him not to try it.
There are WAY too many variables here, I just stated what I have seen with fellow business owners over many years in all types of businesses.

Yes I agree with you here. I actually opened my wife a salon 10 years ago and the first year was an absolute struggle. It has paid off over the years but yes it can be an absolute struggle and there are many variables that come into play.

 

[MwTech Inc]

I posted so the OP and others would realize what it takes to start a side business on the way to owning.
One has to take all of the benefits at ones job and extend that out over at least 10 years, 401, sick time, paid vacation, list goes on.
Now add up all the business expenses, insurance, machines, tooling, repairs, his labor to take money home, list goes on and on...
Add these together...........this new venture must cover that completely or the OP is going backwards...then add profit to the mix.
Plus in this case, once the OP commits to the building he can't be two places at once so the new momma better be OK with 95% of baby care.

Now, maybe he's loaded with money, will get a nanny and the wife doesn't care what he does.....and is glad he's getting out of the house.....

 

[alek95]

It's possible to have a misbalance regardless if you are a entrepreneur or if you are an employee.

I know lots of people who have put 30+ years in as employees working long hours and not seeing their kids. On their last day, they get a cake and some pizza (maybe a watch if they are lucky but that rarely happens any longer) and then they go home. All those years slaving away meant nothing in the end.

The best advice is to have balance in everything you do in life.

Small business ownership is not for everyone. I know many people who have found unprecedented freedom, freedom they never had when they were employed working for someone else. Others feel like they are locked in a prison.

 

[Ox]

All those years slaving away meant nothing in the end.

Of course it did.
It paid for everything along the way.

He's got $2000/month and 80% (+?) medical for life, and whatever he has in his 401 or whatnot to live on.

I'd say that he's got quite a bit, and now he has time to play/travel/snowbird.
There are already enough assholes out there downplaying the value in earning your own living, and helping to provide for the handicapped and widows of the community. We Shirley don't need some of our own crowd adding to the New Age BS.


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Think Snow Eh!
Ox

 

[Covenant MFG]

Sometimes reading responses from the "If your business is successful it'll only be because you destroy your personal life and hate everyone" crowd gets depressing.

Then you realize it's like listening to relationship advice from the 60 y/o grouch who's in the middle of his 4th divorce and tells you to listen up cause he's a marriage expert with lots of experience. You kinda gotta smile and nod.

 

[Covenant MFG]

Also, that shop space looks /awesome/. Good call IMO to rent it- I see the first stage of business start up as the experimental stage, where it may or may not work. No debt, no owned property, easy to cut loose and try something else if it doesn't work out, nothing really keeping you from expanding and buying property or financing equipment once it does.

 

[MwTech Inc]

Sometimes reading responses from the "If your business is successful it'll only be because you destroy your personal life and hate everyone" crowd gets depressing.

Really?? now where did I say that???

I simply stated what I have seen in many instances over the course of 40 years being in business covering many different industries.
Again, I never advised the OP not to do it....what he has been offered is acceptable.
But the human nature is to see everything with nice rosy glasses ....so a little dose of reality won't hurt a thing.
Maybe I saved a marriage, maybe not...makes no difference, but a least the OP (if he read this thread?) may think about where he is going a bit different.
Now before you all get your panties in a wad.............
I absolutely love machining, taking that piece of material and thru whatever process out comes a functioning part.
In about a month or so I'll be up to 3 cnc's here making parts, not including the fab shop.
So I'm not doom and gloom, I totally enjoy what I'm doing.

 

[604Pook]

A good job and good side hustle, is a great combo for a lot of people. Kind of the best of both worlds if you manage your time. Harder though if you need to pay rent for the side hustle and aren't there all day.

How long would it take you to get machines and have them setup making parts?

 

[snowman]

Cost to build 40x60x14 with two man doors and one rollup and one window on 4" pad with minimal site work is right about $60-70k. That's with the Amish putting up the building and doing the concrete. They blew the hell out of everyone else. For the amount of time it'll take them, and the amount of time it would take me, it's better to just write the check.

This is an awful time to start a business. You are at the top of a peak in terms of growth. Consolidation is coming next, which means your competition who already has all the customers, the space, and the machines will work less.

With that said, survive through the consolidation and you have the opportunity to grow like crazy once the next boom hits.

If any of my advice about the current market is off, then let me know as I should start doing fab work again. I am seeing a lot of people strugging to make ends meat, and a lot of competition on the professional tool hustler market though, and the current payout sucks.

 

[snowman]

Small business ownership is not for everyone. I know many people who have found unprecedented freedom, freedom they never had when they were employed working for someone else. Others feel like they are locked in a prison.

NOTHING worse than being in prison and knowing you have the keys. I'm currently there. I'm hoping to spring myself in the coming weeks.

I did 5 years of self employment and was just getting good at it, then I took a job. It sure was nice to have a steady income instead of feast / famine. Then I got the itch, and I had a ton of cash saved up from steady income without worrying about growth. Now my side hustles have side hustles and my brain hurts, but I'm stuck. It's a weird sensation.

I'd like to say I'd kill for $200 a month transition to $1500 a month....but I've been there, got the t shirt, burned holes in it welding, turned it in to a shop rag. I learned how that turns out. I had 30 days to move, and I still left some really nice machines sitting in a friend's field for seven years.

If you can't work at it long enough to front the money to build the shop, you probably best not have it. That's twenty years of mistakes built in to one opinion.

FWIW, my rent was free in the beginning for traded labor. And I was warned by other members here.